Front Matter To" Foreign Trade Regimes and Economic
Total Page：16
File Type：pdf, Size：1020Kb
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Foreign Trade Regimes and Economic Development: Chile Volume Author/Editor: Jere H. Behrman Volume Publisher: NBER Volume ISBN: 0-87014-508-8 Volume URL: http://www.nber.org/books/behr76-1 Publication Date: 1976 Chapter Title: Front Matter to "Foreign Trade Regimes and Economic Development: Chile" Chapter Author: Jere H. Behrman Chapter URL: http://www.nber.org/chapters/c4023 Chapter pages in book: (p. -25 - 0) Foreign Trade Regimes and Economic Development: CHILE ) 1 r Foreign Trade Regimes and Economic Development: ASpecial Conference Series on Foreign Trade Regimes and Economic Development VOLUME VIII NATIONAL BUREAU OF ECONOMIC RESEARCH New York 1976 I CHILE by JereR. Behrman UNIVERSITY OF PENNSYLVANIA d I DISTRIBUTED BY Columbia University Press New York and London NATIONAL BUREAU OF ECONOMIC RESEARCH A Special Conference Series on Foreign Trade Regimes and Economic Development Library of Congress Card Number: 74—82376 ISBN for the series: 0—87014—500—2 ISBN for this volume: 0—87014—508—8 Printed in the United States of America DESIGNED BY JEFFREY M. BARBIE - o S V NATIONAL BUREAU OF ECONOMIC RESEARCH OFFICERS Arthur F. Burns, Honorary Chairman Robert E.Lipsey,Director, International and J. Wilson Newman, Chairman Financial Studies Moses Abramovitz, Vice Chairman Joel Popkin, Director, NBER-Washington John R. Meyer, President Harvey J. McMains, Vice President- Thomas D. Flynn, Treasurer Executive Director DouglasH. Eldrldge,ExecutiveSecretary Sherman I. Maisel, Co-director, NBER.West GaryFronun, Director, Industrial Institutions and Geoffrey H. Moore, Director, Business Processes Research Cycle Research Victor R. Fuchs, Vice President; Co-director; Edward K. Smith, Director, Corporate Planning NBER-West and Development EdwinKuh, VicePresident and Director, Computer Research Center DIRECTORS AT LARGE Atherton Bean, International Multifoods John R. Meyer, Harvard University Corporation Geoffrey H. Moore, National Bureau of Andrew F. Brinuner, Brimmer & Company, Inc. Economic Research Arthur F. Burns, Board of Governors of J. Wilson Newman, Dun & Bradstreet. Inc. the Federal Reserve System James J. O'Leary, United States Trust Wallace J. Campbell, Foundation for Company of New York Cooperative Housing Rudolph A. Oswald, American Federation of Erwin D. Canham, Chrtttian Science Monitor Labor and Congress of Industrial Organizations Emiio 0. Collado, Exxon Corporation Robert V. Roosa, Brown Brothers Harriman Solomon Fabricant, New York University & Co. Frank L. Fernbach, United Steelworkers Eli Shapiro, The Traveler: Corporation of America Arnold M. Sotoway, .#'amaicaway Tower, Eugene P. Foley,MontroseSecurities, inc. Boston, Massachusetts Edward L. Ginzton, Varian Associates Lazare Teper, International Ladies' Garment David L. Grove, international Business Workers' Union Machines Corporation Theodore 0. Yntema, Oakland University Walter W. Heller, University of Minnesota DIRECTORS BY UNIVERSITY APPOINTMENT Moses Abramovitz, Stanford Robert J. Lasnpman, Wisconsin Gardner Ackley, Michigan Maurice W. Lee, North Carolina Charles H. Berry, Princeton Almarin Phfflips, Pennsylvania Francis M. Boddy, Minnesota Lloyd 0. Reynolds, Yale Otto Eckstein, Harvard Robert M. Solow, Massachusetts Institute of Walter D. Fisher, Northwestern Technology R. A. Gordon, California, Berkeley Henri Theil, Chicago J. C. LaForce, California. Los Angeles William S. Vickrey, Columbia DIRECTORS BY APPOINTMENT OF OTHER ORGANIZATIONS Richard M. Bird, Canadian Economics Walter E. Hoadley, American Finance Association Association Philip M. Klutznick, Committee for Eugene A. Birnbaum, American Management Economic Development Associations Paul W. McCracken, American Statistical Carl F. Christ, American Economic Association Association Thomas D. Flynn, American Institute of Roy E. Moor, National Association of Certified Public Accountants Business Economists Harold G. Halcrow, American Agricultural Douglass C. North, Economic History Association Economics Association DIRECTORS EMERITI Percival F. Brundage Albert 3. Hettinger, Jr. Boris Sttishkin Frank W. Fetter George B. Roberts Willard L. Thorp Gottfried Haberler Murray Shields Joseph H. Wilhits I SENIOR RESEARCH STAFF Gary S. Becker 3. Royce Ginn William M. Landes M. Ishaq Nadirl Charlotte Boschan Raymond W. Goldsmith Robert B. Lipsey Nancy Ruggles Philip Cagan Michael Gort Sherman 3. Mabel Richard Ruggles Stanley Duller Michael Grossman Benoit B. Mandelbrot Anna 3. Schwartz Solomon Fabricant F. Thomas Juster John R. Meyer Edward K. Smith Milton Friedman John F. Kain Robert T. Michael George 3. Stlgler Gary Fromm John W. Kendrick Jacob Mincer Robert J. Willis Victor R. Fuchs Irving B. Kravis Use Mlntz Victor Zarnowitz Edwin Kuh Geoffrey H. Moore I Relation of the Directors of the National Bureau to Publication of the Country Studies in the Series on Foreign Trade Regimes and Economic Development The individual country studies have not passed through the National Bureau's normal procedures for review and approval of research reports by the Board of Directors. In view of the way in which these studies were planned and re- viewed at successive working parties of authors and Co-Directors, the Na- tional Bureau's Executive Committee has approved their publication in a manner analogous to conference proceedings, which are exempted from the rules governing submission of manuscripts to, and critical review by, the Board of Directors. It should therefore be understood that the views expressed herein are those of the authors only and do not necessarily reflect those of the National Bureau or its Board of Directors. The synthesis volumes in the series, prepared by the Co-Directors of the project, are subject to the normal procedures for review and approval by the Directors of the National Bureau. I S To - Lucy ii 4 Contents Co-Directors'Foreword xix Acknowledgments xxii Principal Dates and Historical Events in Chile xxiv Part I: Introduction Chapter 1: The Foreign Sector and Chilean Economic Development: An Overview 3 1.1 Introduction 3 1.2 The Period Before the Great Depression 5 1.2.1 Failure to Re-establish Enduring Complete Convertibility 10 1.2.2 Shift to Foreign Ownership of Major Exports 10 1.2.3 Evolution and Impact of Import-Substitution Policies 12 1.2.4 Liberalization, Foreign Dependence, and Vulnerability 13 p 1.2.5 Liberalization and Economic Growth 17 1.3 The Impact of the Great Depression 19 1.4 Phases of Exchange Control After the Great Depression 21 1.4.1 193 1—55: Phases I and 11—A Quarter Century of Quantitative Restrictions 21 1.4.2 1956—58: Phase Ill—The Ibaflez-Klein-Saks Stabilization and Liberalization Program 27 1.4.3 1959—61: Phase IV—The Alessandri Stabilization and Liberalization Policies 28. S X CONTENTS 1.4.4 1962—64: Phase Il—Reversal to Restrictionism, Interventionism and Inflation 29 1.4.5 1965—70: Phase 111—The Frei Stabilization and Liberalization Program 30 1.4.6 197 1—73: Phase Il—Allende and Popular Unity Policies 31 1.5 Major Conclusions 34 Notes 39 Chapter 2: An Annual Macroeconomefric Model for Chile, 1945—65 46 2.1 Structure of the Model 47 2.1.1 Policy Variables 48 2.1.2 Model Relationships 49 2.2 Simulation Procedure 52 Notes 54 Part II: Evolution of the Structure of Exchange Control Regimes in Recent Decades Chapter 3: Exchange Control Institutions and Patterns in the Nominal Exchange Rates 59 Summary and Conclusions 59 3.1 Institutional Responsibility for Exchange Control 61 3.2 Major Trends in Nominal Exchange Rates (NERs) and Price-Level-Deflated NERs (PLD-NERs) 65 3.2.1 OfficialPLD-NER 65 3.2.2 Export Draft PLD-NER 70 3.2.3 Gold PLD-NER 70 3.2.4 Wine PLD-NER 71 3.2.5 Free Funds PLD-NER 72 3.2.6 Black- or Free-Market PLD-NER 73 3.2.7 Bank Spot PLD-NER 74 3.2.8 Bank Future PLD-NER 77 3.2.9 Special-Commercial PLD-NER 78 3.2.10 Provisional PLD-NER 78 3.2.11 Central Bank PLD-NER 78 3.2.12 Brokers' PLD-NER 78 3.2.13 National Accounts PLD-NER 79 • 3.2.14 Other Rates 80 Notes 80 ii a CONTENTS Chapter 4: Supporting Policies for Exchange Control Regimes 83 4.1 Import Policies 83 4.1,1 Tariffs and Related Indirect Taxes 85 4.1.2 Quotas, Licenses, Foreign-Exchange Budgets, and Permitted Lists 88 4.1.3 Time Constraints on Foreign-Exchange Cover for Imports 91 4.1.4 Prior Deposits on Imports 92 4.1.5 Special Regimes 95 4.1.6 Bilateral, Compensation, and Barter Agreements 99 4.1.7 Government Agencies 100 4.1.8 Regional Agreements 102 4.2 Export Policies 103 4.2.1 Large-Scale Copper Mining 104 4.2.2 Other Exports 110 4.3 Policies for Other International Economic Transactions 114 4.3.1 Tourism and Other Invisibles and Imports for Personal Use 115 4.3.2 Foreign Investment Other Than in Large-Scale Copper Mining 116 4.3.3 Official Capital Flows and Foreign Debts 118 4.3.4 Miscellaneous Transactions 119 Notes 120 Chapter 5: Effective Exchange Rates, Effective Protection Rates, and Domestic Resource Costs 126 Summary and Conclusions 126 5.1 Time Paths of Import Premiums, Price-Level-Deflated Effective Exchange Rates, and Premium-Inclusive Price-Level-Deflated Effective Exchange Rates 127 5.1.1 Time Patterns in Aggregate Import Premiums and Price-Level-Deflated Effective Exchange Rates 127 5.1.2 Time Patterns in Disaggregate Premium-Inclusive Price-Level-Deflated Effective Exchange Rates 131 5.2 Implicit Tariff Rates, Effective Protection Rates, and Domestic Resource Costs in the 1960s 137 5.2.1 Mean Level of the Rates 140 5.2.2 Sectoral and Subsectoral Differences in Relative